Tag: Penalties for False Claims

The federal False Claim Acts make it a crime to file a false claim for payment from the federal government. One common example is Medicare fraud. This involves billing for treatments or medications that were never provided. The Acts cover claims that are made despite knowing that the claim is false. It also covers claims by someone who is recklessly disregarding information that would lead them to know that the claim is false. To encourage the reporting of false claims, the Acts also provide whistleblowers with compensation and protection from retaliation.

Penalty for Violating Federal False Claim Acts

The federal False Claim Acts provide for both civil and criminal penalties against violators. The criminal penalty for violating federal False Claim Acts can include fines of up to $50,000 and/or imprisonment. Civil penalties of up to three times the amount falsely claimed plus an additional penalty of up to $11,000 per false claim are also possible.

Whistleblower Compensation for Reporting False Claims

If the government learned of the fraudulent activity from a whistleblower, the whistleblower may be entitled to compensation under qui tam laws. The amount of compensation depends on whether the government recovers the funds, or the whistleblower’s own lawsuit recovers the funds. They range from 15 to 30 percent of the total amount recovered by the government.

To begin a qui tam action, the whistleblower must file a sealed complaint in the appropriate court and serve the complaint on the U.S. Attorney for that district. The government then has 60 days to determine whether it will prosecute the case. If the government declines to prosecute the case, the whistleblower may prosecute it privately.

Whistleblower Protections Under Federal False Claim Acts

Whistleblowers are protected from retaliation for any actions taken under the federal False Claim Acts. This includes both making reports to the government and filing a private lawsuit under the Acts. Employers cannot terminate, harass, or reassign whistleblowers to less desirable positions or schedules. Furthermore, they cannot take any adverse action against an employer because they took action as permitted under the Acts. If you can prove retaliation occurred, the court can force the employer to reinstate the employee. Further, the employer will have to provide them with double their back pay plus interest. Finally, the employer must reimburse their legal costs and any other expenses incurred as a result of the retaliation.

Successfully prosecuting a qui tam action or whistleblower claim requires extensive knowledge of legal procedures and the specific laws governing the false claim. Procedural errors or insufficient evidence can lead to dismissal of the action. This can happen even though they may have been able to succeed on their merits. To speak with an experienced qui tam and whistleblower attorney about how to proceed, call Bothwell Law Group today.

In the last thirty years, there have been many changes to the False Claims Act that have affected the civil penalties for cases tried under this piece of legislation. The significant changes came to pass in 1986 and 2009. The False Claims Act has been around since 1863, but these years saw the first wide-reaching changes to the legislation. Nearly all the changes directly or indirectly affected the False Claims Act civil penalties. Some changes focused on when and what civil penalties may apply, and some directly changed the amount of the penalties.

1986 Changes to the False Claims Act Civil Penalties

The changes enacted by Congress to the False Claims Act in 1986 came as a surprise to most working in this sector. They were very wide-reaching and applied to nearly all aspects of the bill. Arguably the most surprising and drastic change was the removal of the government possession of information barrier for qui tam suits. This significantly changed the way whistleblowers receive civil penalty awards.

Another huge change was the susceptibility of the defendant to possible civil penalties if they are “deliberately ignorant” of the truth or use “reckless disregard” when filing claims. This change was very controversial. Some said it reduced the number of cases filed under the False Claims Act and resulted in considerable civil penalties for the government and the whistleblower.

Another significant and controversial change in 1986 was the restoration of what’s called a “preponderance of evidence” provision for all aspects of the suit, including civil penalties. As with many of the other changes in 1986, many saw this as being too friendly to the corporations often penalized under the Act. This trend continued with the next change, which greatly increased the civil penalties handed down to the whistleblower for false claims made under the Act. They were now liable for triple the damages requested in their suit, and a civil fine of between $5,000 and $10,000 per claim.

However, some changes were beneficial to whistleblowers. For example, the percentage of the civil penalties awarded to the whistleblowers increased from 15% to 30%, which has resulted in more people coming forward to file claims under the Act. In the same vein, a successful plaintiff now has their expenses and legal fees paid by the defendant. As such expenses and fees sometimes ran into the hundreds of thousands of even millions of dollars, this was a milestone change for whistleblowers and the attorneys who represent them. Whistleblowers also gained job protections, a point not previously covered under the Act despite many calls to do so.

2009 Changes to the False Claims Act Civil Penalties

2009 saw the biggest changes to the False Claims Act. Most of these changes were beneficial to whistleblowers, especially those that mandated larger civil penalties for defendants found liable under the Act. As with the changes to the Act passed in 1986, some related directly to civil penalties and some didn’t.

One of the biggest changes greatly increased the potential liability for civil penalties under the Act. The change removed the controversial “presentment” requirement, the result of a contentious Supreme Court decision in 2008. This pleased many whistleblower advocates.

Another important change to the False Claims Act made in 2009 expanded the legal definition of a “claim.” It now applies to many more types of suits related to the willful misuse of government funds or property. Again, this change was a landmark victory for whistleblowers and their advocates.

Another change that directly affected civil penalties was the expansion of liability to people who committed acts of conspiracy to violate the False Claims Act. Many individuals and organizations have had to pay significant civil penalties under this change when they would not have had to pay such penalties before.

While the changes discussed so far were drastic, increased coverage for whistleblowers was arguably the single most influential 2009 change to the False Claims Act. Previously, only employees had protections under the Act when making claims against the companies that employed them. Now, however, contractors and agents have protections as well. Since then, many more people and entities were liable under the Act and forced to pay civil penalties due to this provision than would have been otherwise. Thus, the broadening of protections is one of the biggest successes of the 2009 changes.

Find out more about False Claims Act civil penalties by contacting Bothwell Law Group. At Bothwell, we have years of experience working on similar cases, so you can rest assured we know what we are doing.